S Korea buyers heading to Iran for talks on resuming oil imports

A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, three sources with knowledge of the matter said.

South Korea is one of eight countries that received waivers from the United States to continue importing Iranian oil for 180 days.

It can import up to 200,000 barrels per day (bpd) of Iranian oil, mostly condensate, the sources said, without invoking US economic sanctions reimposed on Iran on November 5.

The North Asian country was the third-biggest buyer of Iranian oil and also the largest importer of its condensate before it stopped imports in September ahead of US sanctions.

South Korea’s condensate imports from Iran stood at 159,770 bpd in January-August, down about 49% from 311,885 bpd in the same period last year, according to Reuters calculations based on the Korea National Oil Corp (KNOC) data.

Condensate is an ultra light oil processed at splitters, typically to produce naphtha for petrochemicals.

While the waiver has given South Korea the green light to resume Iranian oil imports, the sources said issues such as payment, shipping and insurance needed to be worked out.

“The actual (import) volume will depend on next week’s negotiations,” one of the sources said, adding that the oil’s price will be a key factor.

The US sanctions waivers have eased pressure on Iran to further discount its oil against Saudi Arabia’s.

SK Incheon Petrochem, a petrochemical unit of SK Innovation; Hyundai Chemical, a unit of Hyundai Oilbank; and Hanwha Total Petrochemicals, a joint venture between Hanwha Corp and France’s Total, are regular buyers of Iranian condensate.

Each of the three imported between 1mn and 3mn barrels of South Pars condensate a month in the first half of the year, the KNOC data showed.